Gas vs Reverse Cycle Heating

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Re: Gas vs Reverse Cycle Heating

Postby Warpspeed » Sun Jan 05, 2014 11:55 am

It seems that there is no "one size fits all" solution to the whole question.

Like many people, I purchased an existing home and went on using what was already provided.
But if you are building a brand new home, its far from a simple straightforward decision, especially if you are new to the area.

And the circumstances are far from static.
All appliances seem to be creeping up in efficiency as time goes on, and tariff rules and rates seem to be constantly changing.

And its not just high service charges to be aware of, but the generally high cost of replacing appliances to switch over from one energy source to another.
Changing may appear to have some long term cost benefit, but it could take many years to recover the cost of doing so.
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Re: Gas vs Reverse Cycle Heating

Postby Tracker » Mon Jan 06, 2014 8:57 am

we all find ourselves in this position.
Oh to be able to start from scratch, and build that perfect house...

but we do need to live with what we have... :idea:

My thought... can you make gas... can you make electricity...

now you see the answer...IMHO... ALL energy providers will be seeking to make their necessary profits from reducing sales as energy costs rise.... ie from Service Charges...

as already disclosed, I cut the town gas off and now use LPG for hot water boosting, and stove top..
and I am increasing my use of electricity, whilst increasing my Solar Collection.. YES.. I have hybrid power, and will continue to expand the hybrid generation until I am effectively Off Grid..

again, I think of the warning of an industry worker, suggesting that energy is energy and every industry will seek to value their product the same as their competition.. hence selling gas by the kWH...

so,, back to the OP....
were you building a new home, you would surely plan to maximise thermal efficiency, and maximise your ability to supply you own energy.. ie. SOLAR PV and Solar HW..
so far, I feel that I am well in front

Mind you, we have found ourselves at a time, when major appliances were approaching the end of their lives and so conversion from town to LP gas was not such a hard choice.. ie. investment in our retirements..
..
.
Last edited by Gordon-Loomberah on Mon Jan 06, 2014 10:06 am, edited 1 time in total.
Reason: removed excessive quoting
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Re: Gas vs Reverse Cycle Heating

Postby Smurf1976 » Tue Jan 07, 2014 5:44 pm

Warpspeed wrote:Like many people, I purchased an existing home and went on using what was already provided.


Same here. The wood heater is cheap to run but the resistive electric heater is a guzzler that's for sure. But since wood is the main form, it hasn't made sense thus far to worry about the inefficiency of the electric heater.

And its not just high service charges to be aware of, but the generally high cost of replacing appliances to switch over from one energy source to another.
Changing may appear to have some long term cost benefit, but it could take many years to recover the cost of doing so.


Businesses are generally reluctant to switch fuels for this reason. They could spend $ millions to switch energy sources, only to have the relative prices move against them shortly afterward thus making the investment worthless.

Generally speaking, commercial users want a 50% per annum return on investment in fuel switching for this reason. That is, a 2 year payback. Some will consider up to a 5 year payback - but only if they don't have something else more profitable (like growing the business itself) to spend their (usually limited) capital on.

From a personal perspective, I'm willing to invest in energy efficiency or fuel switching but only within the same risk management that I apply to any other investment (eg shares). In other words, I do consider it a possibility that such an investment ends up being a dud financially if relative prices change although I don't apply any strict rules about payback period.

Technological improvement is another factor. Even if you bought the best LED lights a year ago, you have effectively paid a higher price and have something considerably less efficient than ones you can buy off the shelf at major hardware stores today.

Looking at it over the years, the only consistently cheap energy sources have been firewood and for larger users the direct use of coal. Everything else has seen the price of one fuel move relative to others at various points in time.

Many industries and even power stations switched to oil in the 1960's as a "cheap" fuel. Then along came the 1970's oil price hikes which in a few cases actually sent the companies broke to the point of closure. Those who have been around a while haven't forgotten that lesson.

It's hard to predict long term fuel prices, but I'll say this:

On-site renewables - once you have the equipment, the cost is pretty much fixed for the life of it unless something breaks. But even that isn't a guaranteed investment if the price of some other energy source were to fall (and household electricity just dropped over 5% here in Tas and there have been plenty of ups and downs in the price of oil and LPG over the years - price falls can and do happen from time to time).

Wood - generally goes up at the rate of inflation so it's pretty low risk.

Coal - depend on whether or not it's export grade and if the mine can physically export the coal. If exportable then you're ultimately exposed to world market pricing. If non-exportable then it should go up at around the rate of inflation - plus the + or - price impact of any CO2 pricing changes.

Oil - Your guess is as good as anyone else's. Even the experts have a bad track record of predicting price but you could certainly say that it's volatile over even short time periods.

Gas - So far as Australian East Coast (Qld, NSW, ACT, Vic, Tas, SA) supply is concerned, the starting up of the LNG plants in Qld is set to link Australian prices with the export value of LNG. And that price is 2+ times the current price.

Electricity from the grid - I do sense a degree of political panic regarding this one and I suspect we'll see moves to limit future price rises. On the other hand, there's not much anyone can do about the exposure of the industry to export parity prices for black coal and gas. The realistic risk is of a small fall in prices through to a further significant rise.
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Re: Gas vs Reverse Cycle Heating

Postby Tracker » Wed Jan 08, 2014 6:26 am

..........Gas - So far as Australian East Coast (Qld, NSW, ACT, Vic, Tas, SA) supply is concerned, the starting up of the LNG plants in Qld is set to link Australian prices with the export value of LNG. And that price is 2+ times the current price.......

and when the ownership of the development, lies in international hands, you know that there will be no sympathy for the locals..
suck it out, ship it away, and then we will import it back. :evil:

and we won't start on the damage left behind after they have depleted what we have available... :cry:
..
.
Retired Engineer and keen PV experimenter - Always ready to learn and share.
2 x CMS2000 (fan cooled) GCI and SE 170W panels
1.7kW First Solar/Outback Island circuit - Peak Replacement Power
Governments won't save the world :-) They will just TAX it :-(
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